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The following information is for X Company's two products - A and B: Product A Product B Revenue $92,000 $88,000 Variable Costs 54,280 46,640 Fixed
The following information is for X Company's two products - A and B:
Product A | Product B | |
Revenue | $92,000 | $88,000 |
Variable Costs | 54,280 | 46,640 |
Fixed costs | $28,520 | $57,370 |
Profit | $9,200 | $-16,010 |
$3,708 of Product A's fixed costs are directly related to Product A; $7,458 of Product B's fixed costs are directly related to Product B. All other fixed costs are allocated to the individual products. X Company is considering droping Product B because of its reported loss
If it drops Product B, what will be the effect on firm profits?
A: $-11,109 | B: $-13,886 | C: $-17,358 | D: $-21,697 | E: $-27,122 | F: $-33,902 |
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